When you’re considering whether to bid for a piece of work in the public sector there are many considerations to be made. One of the most critical questions you have to answer is:
How will the buyer be evaluating bids and choosing who to work with?
If you’ve a good understanding of the competitive landscape and where you stand within it, this question could be the difference between deciding to bid or not.
Within the public sector, any published tender you look at will have clearly defined criteria against which the buyer will be assessing responses.
For the most basic level of consideration, your submission will be checked to make sure you have provided all requested information – provision of accounts, proof of insurance, all questions answered. This qualification section of the response usually results in companies being passed or failed (as opposed to being scored). It’s only after passing this stage that your proposal will actually be assessed and scored.
The scoring stage focuses on two components to evaluate your bids – Commercial (pricing) and Quality (which will often include Social Value). The importance of each component will be stated in the documents and varies from tender to tender – one submission could be 80% price, 20% quality whereas another could be 80% quality, 20% price. Your score for each component will be combined to provide your overall score, which will be compared against the other submissions.
From this scoring, one or more bidders will be successful in either securing the work or gaining access to framework.
There are different ways for price scoring to be calculated, and it will always be clearly stated in the document pack which method the buyer will be using.
By far the most common way is for the prices of the bidders to be compared against each other and for the lowest overall price to be awarded the full allocation of marks. The other bidders will be awarded marks in proportion to their price versus the lowest price.
(£100,000/£116,279) x 60% = 52%
(£100,000/£122,448) x 60% = 49%
In the above example – Commercial is worth 60% of the tender
The company with the lowest price will be awarded the highest score (60%) and the scores of the other companies will be a proportion of this.
It’s worth noting that often there will be a maximum price set by the buying authority and any bids that are over this won’t be considered. For some projects, the authority has a pretty good idea of where costs should be and the maximum price will be set quite keenly.
Unlike price, quality is usually evaluated in absolute terms, meaning that each submission is assessed independently of the others.
For quality, there will be a number of questions each with their own weightings to reflect the importance of the answers.
5/5 x 20% = 20%
4/5 x 20% = 16%
3/5 x 20% = 12%
3/5 x 20% = 12%
5/5 x 20% = 20%
80% x 40% = 32%
In the above example – Overall quality is worth 40% of tender
For each question you can be awarded a score of anywhere between 0-5, based on the quality of each answer and there are five questions in total.
Once your price and quality score have been calculated they will be combined and the bidder(s) with the highest overall score will be the winner(s).
Commercial (Price) Score
In the above example – The scores of the three companies are tallied.
We can see that even though Company 1 has the best price, they were let down by the quality of their answers. The quality of the answers from Company 3 was on par with Company 2, however, their pricing cost them the contract.
From the tender documents provided, it should always be clear how the submissions will be assessed. You should always expect to see:
◆ Price weighting and criteria
◆ Quality weighting and criteria
◆ Number of suppliers that will be awarded
From the first stages of planning you need to consider each of these factors – making sure the opportunity is viable, and that your approach to the bid reflects how it will be scored:
◆ If the bid is very heavily weighted towards quality how much sense would it be to focus on a very low cost, low quality solution?
◆ Can you meet the buyer’s criteria for an acceptable price?
◆ Do you have quality advantages over your competitors that you can evidence for a tender that is heavily weighted towards quality?